Articles

How To Buy A Business With No Money – Dan Lok


(dramatic music) (dry erase marker squeaking) – A lot of entrepreneurs, sometimes, they say, well, you know what, I don’t have enough
money to grow my company, or I don’t have enough capital. I always believe that it actually, how many of you have heard of the saying it takes money to make money? And sometimes it does,
sometimes it doesn’t, but from my experiences,
’cause when I first started my own business I had no money. I didn’t have capital
to grow my own business. So I thought, well, is that true? At first I believed it was true, but later on in my career I learned that actually, it’s not true, because I believe that
if you cannot make money without money, you probably
cannot make money with money. Write that down. If you cannot make money without money, you probably cannot make money with money. Because when you have no money, how many of you ever had this experience? When you were getting started you had, maybe bush wrapping
and not enough capital, but somehow you come up with an idea, you come up with the strategies, you make things work, and that happened and you got some sales. How many of you had that experience? Yeah, ’cause it forces you to be, what? To be thinking out of this box, right? Creative. So, repeat after me, “I don’t need money.” – [Audience] I don’t need money. – I need a better strategy. – [Audience] I need a better strategy. – Again, I don’t need money. – [Audience] I don’t need money. – I need a better strategy. Once more, twice as loud. I don’t need money. – [Audience] I need a better strategy. – Let me tell a story. There was this flower shop owner. His name is Matt. And Matt, one day, he owns this flower shop in his little town and it’s been doing well
for a number of years and one day he got
approached by his competitor, an older gentleman, wanted to sell his flower shop to Matt, ’cause he’s getting old, wants to retire, travel the world. And Matt said, okay, if
I buy this flower shop, I would own both flower shops in town and basically, I’ll be a monopoly, everybody would be buying from me only. This is great. Well, how much you want the flower shop? How much are you asking for? The older gentleman,
flower shop owner said, well, I want $50,000. I don’t have $50,000. Well, that’s my asking price. If you want to buy my flower shop, it’s $50,000. Okay, so Matt doesn’t have the money, but he said, I want to
buy and he went home, talked to the wife. Well, can we get a line of credit? Can we borrow money, what can we do, because I can see we
can double the business if he can just buy this flower shop. Couldn’t come with solution, the wife thought he was crazy. And Matt was like, what should I do? Ah, he thought about it, then he called up a brilliant entrepreneur, business man. Let’s call him Dan. (audience laughing) He called up Dan, now, not saying it’s me, just called up this
brilliant business man, he said, well, Dan, can
you loan me $50,000? And Dan was like, well, why do you need the $50,000 for? You know, there’s this
flower shop in my town, that I know if I can buy
it, I know it’s a great location, we will corner the market, and I can double my business
and it would be great. I know it would be great
but it costs 50 grand, I talked to my wife, she
doesn’t want me to do it and we can’t actually mortgage the home or anything like that, but I
think it’s a great decision. Now, Matt doesn’t have the money because what? He doesn’t need the
money, he needs a what? – [Audience] An investor. – Okay, so the brilliant
business man said, well, Matt, you don’t need money, you need a better strategy. Matt was like, what do you mean by that? Ask yourself this question, and you can write this down, who would benefit from this purchase? Who would benefit from you actually purchasing this store? Who would benefit from this? How do you add value? How do you add value? How do you add what? Value. So let me ask you a question, if Matt was gonna buy this
store, who’s gonna benefit? Yell the answer. Who’s gonna be at benefit? The owner, yes, the older gentleman, yeah, he’s gonna benefit. Who else is gonna benefit? Supply, yes. Who is it gonna benefit? Maybe, Matt, himself, ’cause
he’s double the business. Maybe the customer,
’cause now maybe they can, better run business,
better service, who knows? So as this business man is asking about, okay, who would benefit,
who would it benefit? Matt said, well, I guess all these people. Then he asked Matt, well,
Matt, let me ask you this, how much wholesale
business are you putting through your flower shop
right now, per year? How much? Well, he said, about $125,000 a year. That’s what I buy from my supplier. Okay, how many suppliers do you buy from? I only buy from one. So this supplier is getting
how much business a year? $125,000, right? Okay, so Matt, you don’t need money, you need a– – [Audience member] Better strategy. – What I want you to do
is I want you to talk to your supplier. I want you to go to supply and you would ask them this, and this is how you would do the pitch. Mr. Supplier, you know,
we’ve been doing business for the last 10 years. I’ve always been a very good customer, you supply to me your
flowers, I love them, our customers love them. I give you about, what, $125,000, give or take, business a year? You know, here is now an opportunity, here’s what I wanna do. I don’t wanna just give you
$125,000 a year business, I wanna give you a quarter million dollar a year in business. But in return what I wanna
do is I want to sell you the exclusive rights to
provide for my flower shop for the next five years. And in return, all I’m
asking is $25,000 from you and I will give you a
quarter million dollars a year worth of business. What do you think? Now, what does the supplier say? No brainer, right? For 25 grand, quarter million
dollar a year business, no brainer, great. Got the 25 grand now, right? Goes back to the older gentleman, the old flower shop owner and says, well, you know you were thinking of selling your shop and I wanna buy it and you were asking how much? – [Audience] 50,000. – You know I’ve been thinking about it, instead of giving $50,000, ah, the older guy’s thinking, ah, this guy’s gonna grind me now. He’s gonna negotiate. I don’t wanna give you $50,000, I wanna give you $60,000. What? Yes, I don’t wanna give you 50, I wanna give you $60,000. Well, why is that? Well, what I need is, you see, I’ve got $25,000 here. I’ll give you $25,000 right now, the rest, can we work out
some sort of installment plan? I’ll give you 60 grand, if you give me better terms. Now think of the 10 grand you make extra, and even if you get the 50 grand, you’ll probably put it in the bank and get very little interest rate anyway, right now, 50 grand, you
just instantly make 10 grand. Now what is this older
flower shop owner gonna say? Yes, no brainer, let’s do that. Okay, great, so 25 grand, got the shop. How much of his own
money has he used so far? None. 25, got the shop, cornered the market, doubled the business,
making more efficient, operate better, do better
marketing, whatever, might be double now, a
quarter million dollars, he can afford for the monthly payment to the old owner, right? Now, let me ask you the question, is this old owner happy? Yes or no? – [Audience] Yes. – Okay, is the supplier happy? Yes, is Matt happy? – [Audience] Yes. – Because you don’t need
money, you need a better– – [Audience] Strategy. – That’s what I’m talking about, the outside of the box. People say, I don’t have money, well, what are you doing? How can you, who would benefit
from seeing you succeed? Who would benefit from the transaction? Who would benefit from the deal? And you can leverage other people’s time, other people’s money and
at the end of the day, what I believe, the
difference between a great entrepreneur and an average entrepreneur, a great entrepreneur just knows more ways or have more contacts
or have more strategies, or thinking outside the box,
they know how to leverage. If we boil it down to
one word, it’s leverage. It’s just leverage, other people’s money, other people’s time,
other people’s expertise, all of that. So take two minutes. How long? – [Audience] Two minutes. – Discuss what I’ve just said about, and how you can apply
this in your own business, just around the table. Two minutes, go. – [Announcer] 10 times your finances. 10 times your business. 10 times your marketing. 10 times your life. Hit the subscribe button now.

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